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Federal Civil False
Claims Act 1865
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Background
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This major piece of legislation
(which impacts healthcare today) was not at all developed to address
the healthcare needs of our country. Rather President Abraham
Lincoln pushed for the legislation during the Civil War to address
widespread abuse by military contractors who were selling materials
to the Union Army. The contractors were providing defective
products, substituting inferior material and charging excessively
high prices for their services. Congress enacted in 1865 the
Civil False Claims Act, including Qui Tam provisions, to permit our
government to fight the fraud that was occurring during the time of
war. Today the government is using the
Federal Civil False Claims Act legislation in many different ways to
recover moneys billed for defective products, inferior materials and
exorbitant prices. In the healthcare industry, they call this
Medicare and Medicaid fraud. The Medicare program addresses
healthcare services provided primarily to our elderly population
while the Medicaid program focuses on healthcare needs primarily of
our poorest citizens.
Do you know what portion of our healthcare
costs in the U.S. is paid with government dollars? Right now
45 cents of every dollar spent for healthcare services is paid by
our federal government. Today the government is biggest
purchaser of healthcare services in the U.S.
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Today's use of this legislation
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The Inspector General, with
help of the Federal Bureau of Investigation (FBI) is looking to
identify cases where healthcare providers (such as hospitals,
physicians, nursing homes, home health agencies and durable medical
equipment companies) are getting moneys for services not rendered or
not provided as specified in the billing process. Our largest
healthcare companies in the U.S. (HCA and Tenet) have paid millions
of dollars to settle investigations into their practices. Our
smallest healthcare providers (individual physicians) are also
receiving attention under this act. There may be either or
both criminal and civil penalties if a healthcare provider is found
guilty of Medicare or Medicaid fraud and abuse. Some acts are
intentional efforts to get extra dollars. Other acts are
omissions made through lack of appropriate documentation in patient
medical records, errors in coding and classifying patient medical
information and mistakes made in billing procedures. |
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Qui Tam (Whistle Blower
Provision)
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The False Claims Act was
designed to encourage citizens to report cases of fraud. When
Medicare pays a bill for healthcare services, the government now
produces a statement called Explanation of Benefits (EOB) showing
what services the provider (hospital, physician or other healthcare
source) gave the patient and the charges for these services.
The patient receives a copy of the EOB and is given a telephone
number to call and report errors in the bill. If the patient
calls, he or she technically is a whistle blower. If an
employee of the hospital, physician or other healthcare source
chooses to report potential fraudulent practices, this person is
also a whistle blower. The federal government may
collect up to three times the amount of money that was billed in
error. The government also collects a fine for each case of
fraudulent practice it identifies. The whistle blower is
rewarded with a percentage of the money that the government collects
as a result of the Qui Tam actions. This amount ranges between
15% and 25% of dollars that the government recovers during its
investigation and settlement/litigation.
To find out more information on this topic,
check the Department of Justice
web site. |
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